Market allocation occurs when competing brokers agree that each will operate exclusively in certain territories, handle only specific types of properties, or serve only certain price ranges, effectively creating local monopolies. Like price fixing, market allocation is illegal regardless of whether the arrangement seems reasonable.
If Broker A and Broker B agree that Broker A will only list properties in the downtown area while Broker B will only list properties in the suburbs, they have committed market allocation. Consumers in each area are denied the benefit of competition.
On the exam, market allocation questions often present scenarios where brokers agree to stay out of each other's territories or specialties. Remember that any agreement between competitors to divide markets is illegal. A single broker choosing to specialize in one area is perfectly legal.
Related Terms
Related Concepts
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
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